Reducing Uncertainty in Relation to Foreign Banks

Abstract

Http://dx.doi.org/10.5007/2175-8085.2016v19n2p60

The financial liberalization that took place in the 1970s and 1980s allowed a greater influx of foreign banks to countries once with restrictions on this type of capital, however, in the 1990s that developing countries experienced a massive entry countries into their territories. Over the years, several studies have examined the effects of banks on the domestic economy, and although the degree of uncertainty regarding some of the consequences of the incursion has been reduced, questions remain to be debated. This article is a survey that reflects on these issues, concluding that greater transparency, regulation and understanding of the characteristics of the receiving economy and the incoming bank are constitutive for the domestic country, receiving the benefits that may arise from the type of influx.